Nasdaq Climbs as Soft Inflation Reading Cools Rate Hike Expectations

The US stock market saw mixed results on Wednesday, as the Nasdaq climbed and the S&P 500 dipped. The S&P 500 fell 19.30 points, or 0.25 percent, to 7,651.54, while the Nasdaq Composite gained 63.52 points, or 0.24 percent, to 26,861.06.

The mixed results came after data showed a moderate rise in inflation, with the Personal Consumption Expenditures Price Index (PCE) increasing 3.4 percent on an annual basis in August, below the 3.7 percent estimate of economists polled by Reuters.

The soft inflation reading cooled expectations that Federal Reserve policymakers would hike rates in October, but market expectations for a rate hike at the Fed's October meeting still slumped to about 37 percent, down from roughly 51 percent in the prior session and nearly 71 percent a week ago.

Analysts noted that recent methodology changes in calculating PCE by the Bureau of Economic Analysis contributed to a lower reading. Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, said: 'What the market is focused on is, is the economy continuing to grow and can it manage those higher interest rates? And I would say so far, the market has looked kind of like history that when the economy is growing, when profits are strong, when there's a secular theme, it will look past higher interest rates.'